Funko didn’t just beat on profits. It beat on sales, gross margins, operating expenses, and earnings before interest, tax, depreciation and amortization (EBITDA).

Even so, management declined to raise annual guidance. Operational investments scheduled for 2020 will now be realized at the end of 2019, and those costs will weigh on this year’s EBITDA and bottom line.

While revenue per property declined this quarter, product sales and total properties expanded. BMO Capital wants to see further expansion before buying in.

“The company’s flagship product, Pop!, is about two-thirds of sales and is enjoying phenomenal popularity, with a product life cycle that has outlasted our original expectations,” Johnson wrote in a note. “We are cautious, though, as we view Pop! as a fad and we think the onus is on the company to diversify and generate new streams of income before the Pop! phenomenon, well, pops.”

Price Action

At time of publication, Funko shares were trading up 1.8 percent at $22.16.